Pandora Has Upside to the Tune of 40%

Surging revenue growth from the Internet radio service's mobile user base should help drive shares higher.

Internet radio service Pandora is still losing money, but the company appears to be successfully driving revenue from its surging base of mobile users.

Late Wednesday, Pandora reported a loss of three cents per share for its fiscal second quarter ended in July, but said it was "break even" excluding roughly $6 million in stock-based compensation. Revenue in the quarter rose 51% year-over-year to $101.3 million. Analysts...